Behind the cost and availability of building materials, the cost and availability of labor is the biggest concern to home builders according to the NAHB/Wells Fargo Housing Market Index. The dramatic increase in demand the past two years put increased pressure on residential construction companies to grow their teams. After analyzing over 900 residential construction companies using CoConstruct we found that companies have added an additional employee a year to their work force. In adding workers however, the average worker clocked 27% less hours than before.
See below for our full construction employment and labor trend findings.
Residential construction employment is on the rise with companies adding a new employee a year
How did companies meet the skyrocketing demands of 2020 and 2021? By increasing their workforce. Between 2019 and 2021, residential construction companies in the US added on average two new employees, using CoConstruct’s time clock feature to track employee hours logged and assist in payroll management. Companies in the Northeast on average had the most employees clocking in on the job site with 10.4 employees per company compared to only 7.8 employees per company for businesses in the South.
While growth was consistent across the US it was stronger in some regions than others. For instance, residential construction companies in the Midwest increased their work force clocking hours on the jobsite by 32% from 2019 to 2021. The three other US regions were fairly uniform with increases in the low 20% range. This variation could be due to the impact of labor and material shortages affecting regions differently.
Residential construction workers clocked 27% less hours in 2021
While the average amount of workers clocking in has increased the last two years, the annual hours worked per employee has instead been a roller coaster ride. The average annual hours worked per employee across the US increased 22% in 2020 before decreasing 27% in 2021. This whiplash was felt even more for workers in the Northeast who saw their hours increase 31% before dropping 43% the following year. Workers in the Midwest, however, saw their annual hours decrease in 2020 by 3% and then again by 12% to 978 hours on average.
This year-to-year fluctuation in annual construction employment hours could be the result of the labor market being slow to catch up with a spike in demand. As demand skyrocketed in 2020 the labor shortage made it difficult for companies to hire workers to keep up, which resulted in workers getting more hours in 2020. But then as companies were able to hire more workers and demand started to taper off to pre-pandemic levels in the second half of 2021, there were less projects and more workers which resulted in less hours per worker.
Average hours worked per residential construction project up 20%
The average number of hours worked on US residential construction projects rose 20%, or by 142 more labor hours, from 2019 to 2021. Regionally this increase went as high as 42% for projects in the Midwest and as low as a 15% decrease in hours logged per project in the Northeast.
The increase in construction employment could simultaneously have caused this increase and decrease in hours. For example, two additional employees on a project means two more workers clocking hours on that job which would exponentially increase the total number of hours on a project. Two additional workers, however, could also mean that the work on a project is overall completed in less hours because more workers are working on different facets in unison. Ultimately the overall square footage of a house likely has the biggest impact on project duration and hours worked.
Where we got our numbers from
CoConstruct helps over 100,000 building professionals manage clients and trade partners, schedule work, track financials, and more. Aggregating and analyzing the data builders input into the system, CoConstruct can identify trends and highlight emerging issues in the residential construction industry. By using and sharing this information CoConstruct is doing its part to eliminate the chaos of project management and help create rewarding experiences for both home builders and clients.